Over the past several months, Advantexe has been requested by seven clients to conduct an end-to-end data
security audit that focuses on examining our information technology systems, simulation backend infrastructure, and organizational data policies and practices to assess compliance with established data security standards, regulatory requirements, and industry best practices. Although Advantexe has invested in an ISO27001 certification to demonstrate our commitment to managing and protecting sensitive information, the process has become more complex, demanding, and frequent.
This trend is not surprising since cyber-attacks have become a common occurrence that can have severe consequences for businesses of all sizes. According to PWC's annual CEO survey, 58% of CEOs consider cyber-attacks a significant threat to business operations. Therefore, it is essential for businesses to comprehend the direct impacts of a cyber-attack, including the increased costs incurred when attempting to mitigate and prevent risks and the importance of aligning the organization to support cybersecurity investment.
Direct Business Effects from a Cyber-attack
Cyber-attacks are not just the concern of the IT department. Every function of a business should be aware of the direct business effects of a significant cyber-attack which include:
- Financial Losses - direct financial losses in the form of stolen funds, ransomware payments, and loss of revenue due to disrupted operations
- Damage to Brand and Reputation - damage to your company’s brand which could result in loss of revenue and overall customer and market trust which will affect the stock price and value of the company
- Legal Liabilities - face legal liabilities, costs, fines, and other potential penalties
- Cost of Remediation - direct costs associated with technical remediation, potential customer repayment, and investments in public relations for damage control
Direct Business Effects of Investing in Cyber-attack Prevention
Preventing cyber-attacks is smart business, but unfortunately, there are direct business and financial impacts to investing in mitigating and preventing cyber-attacks such as:
- Increased Costs of Goods Sold - Investing in mitigation measures such as security software and hardware can increase your cost of goods sold (COGS). Alignment with sales and marketing is critical
- Reduction in Gross Margins - investments can reduce gross margins if the costs associated with implementing these measures are not offset by pricing strategies or positioning the secure systems to drive increased margins
- Higher Investments in Marketing and Communications - increased investments in marketing and communications to communicate the company's improved security posture to customers, partners, and stakeholders
- Increased Investments in Technology and People - requires investments in technology such as security software, hardware, and network infrastructure, as well as investments in people, increased staff, and training
How Training Can Help
To effectively manage costs, mitigate risks, align the company, and communicate with customers, the board, and shareholders, organizations must understand the impact of both investing and not investing in cybersecurity.
Training programs utilizing business simulations are a powerful way to help businesses and employees at all levels understand the business impacts of cyber-attacks, develop effective strategies and investments to mitigate the risks and ensure decision-making is aligned cross-functionally.
Advantexe has developed a 5-hour Masterclass that features a new digital business simulation that focuses on building business acumen skills to understand how security decisions impact profitability and how to work with functional departments to have business discussions about needs.
In the simulation, learners take on the role of the Chief Information Security Officer (CISO) for a multi-billion-dollar industrial lubricant manufacturing company called Orange Enterprises, Inc. (OEI). In teams of 3-4 learners, they are responsible for managing the security team, setting and executing a cybersecurity departmental plan, developing a strategy and corresponding budget, and working closely with cross-functional teams to ensure security systems and services are aligned while working with the CFO to manage and control expenses.
In summary, cyber-attacks have a significant cost on a company, whether from a direct hit, remediation costs, or preventative costs. To help employees have a comprehensive understanding of cybersecurity strategy and their role in executing it, organizations must provide training and communications.
